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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
__X___ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the quarterly period ended March 31, 1996.
_____ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from _____ to _____.
Commission File Number
0-27410
INTERCARDIA, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
Delaware 56-1924222
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
P.O. Box 14287
3200 East Highway 54
Cape Fear Bldg., Suite 300
Research Triangle Park, NC 27709
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code 919-558-8688
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES __X___ NO_____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April 30, 1996
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Common Stock, par value $.001 6,726,621 Shares
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Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.20 *Agreement for Feasibility Study, Amendment Number One
thereto, and related License Agreement, each dated April 15,
1996, among Jago Pharma AG, Jagotec AG, Intercardia, Inc.
and CPEC, Inc.
11.1** Statement re computation of net income (loss) per share
* Confidential treatment requested
** Incorporated by reference to the Registrant's Form 10-Q for the quarter
ended March 31, 1996.
(b) No reports on Form 8-K were filed during the period.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERCARDIA, INC.
Date: July 8, 1996 By:
Richard W. Reichow,
Senior Vice President,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
[ ] - Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request
AGREEMENT FOR FEASIBILITY STUDY
THIS FEASIBILITY STUDY AGREEMENT (the "Agreement") effective as of
the 15th day of April, 1996, by and among JAGO Pharma AG, a Swiss
corporation, having its place of business at Eptingerstrasse 51,
CH-4132 Muttenz, Switzerland (hereinafter, together with its
Affiliates, including without limitation Jagotec AG, a Swiss
corporation, referred to as "JAGO") and Intercardia Inc., a
Delaware corporation, having a place of business at 3200 Chapel
Hill Road/Nelson Highway, Cape Fear Building, Suite 101, Research
Triangle Park, NC 27709, U.S.A. (hereinafter referred to as
"Intercardia"), and CPEC. Inc., a Nevada corporation having its
place of business at Suite 1100, 300 South Fourth Street, Las
Vegas, Nevada 89101, U.S.A. (hereinafter referred to as "CPEC";
Intercardia and CPEC hereinafter collectively referred to as
"INTERCARDIA").
WHEREAS, JAGO possesses certain proprietary technology and
know-how relating to pharmaceutical systems for the controlled
release of active substances, including but not limited to, JAGO's
patented GEOMATRIX(R)* Technology (as defined below); and
WHEREAS, INTERCARDIA is interested in certain development work
with respect to a once-daily tablet containing the molecule
BUCINDOLOL (hereinafter referred to as the "Drug"); and
WHEREAS, INTERCARDIA is interested in having JAGO develop
formulations, based on JAGO's patented GEOMATRIX Technology and
the JAGO Know-How (as defined below), for the delivery of
initially [ ]mg of BUCINDOLOL or eventually such other initial
dosage level as determined by INTERCARDIA, and eventually
different other dosage strengths, and JAGO is willing to conduct
a feasibility study to develop such formulations under the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
following mutual covenants and intending to be legally bound
hereby, the Parties hereto agree as follows:
1. Definitions
For purposes of the Agreement, the terms defined in
this Section 1. shall have the following meanings:
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* GEOMATRIX is a registered trademark of the Jago Group of Companies
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
1.1 "Affiliate" shall mean, with respect to each Party
hereto, any corporation, partnership or other entity
controlled by, controlling or under common control with,
such Party, with "control" meaning direct or indirect
beneficial ownership of more than 50% of the voting power
of, or more than 50% of ownership interest in, such
corporation, partnership or other entity; provided however,
that Interneuron Pharmaceuticals Inc. shall be excluded from
this definition of Affiliates with respect to INTERCARDIA.
1.2 "Confidential Information" shall mean any and all of
the JAGO Know-How and the INTERCARDIA Know-How, as well as
any and all information developed during the course of the
Agreement including but not limited to, materials and
techniques, analytical and testing methods, chemical
formulas and specifications, formulation details, product
design criteria, test data and results and other technical
information relating to Drug, Prototypes or formulations
developed hereunder.
1.3 "Feasibility Proposal" shall mean the proposal
attached hereto as Exhibit A for conducting the feasibility
study under the Agreement.
1.4 "GEOMATRIX Technology" shall mean JAGO's oral
controlled drug release delivery and related technology
which utilizes a hydrophilic drug-containing matrix tablet
which controls the release of the drug through the use of
one or more barrier layers, together with all improvements
thereon and thereto.
1.5 "INTERCARDIA Know-How" shall mean all of INTERCARDIA's
information and data, which are not generally known,
including but not limited to, trade secrets, patent claims
and related information not yet disclosed to the public,
formulas, procedures, protocols, techniques and results of
experimentation and testing which relate to the Drug and/or
are useful and/or necessary to develop, make, use or sell
products containing the Drug as the active ingredient.
1.6 "INTERCARDIA Patents" shall mean all patents and all
patent applications, other than JAGO Patents, owned by or
licensed to INTERCARDIA in any country (as of the date
hereof and hereafter), relating in any manner to the Drug or
the use or process of manufacture thereof, together with any
and all corresponding patent applications and patents which
issue therefrom, and all divisionals, continuations,
continuations-in-part, reissues, renewals, extensions,
substitutions, confirmations or additions to any such
patents or patent applications.
1.7 "JAGO Know-How" shall mean all of JAGO's information
and data, which are not generally known, including but not
limited to, trade secrets, patent claims and related
information not yet disclosed to the public, formulas,
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
procedures, protocols, techniques and results of experimen-
tation and testing which relate to the GEOMATRIX Technology
and/or are useful and/or necessary to develop, make, use or
sell products using the GEOMATRIX Technology, but to the
extent only, such JAGO Know-How is not subject to agreements
or undertakings of JAGO with third party restricting the use
or disclosure thereof to INTERCARDIA.
1.8 "JAGO Patents" shall mean all patent applications
heretofore or hereafter filed or having legal force in any
country and owned by or licensed to JAGO or its Affiliates,
which claim the GEOMATRIX Technology or the process of
manufacture by use of, or the use of, the GEOMATRIX Techno-
logy, together with any and all corresponding patent
applications and patents which issue therefrom, and all di-
visionals, continuations, continuations-in-part, reissues,
renewals, extensions, substitutions, confirmations or
additions to any such patents or patent applications.
1.9 "License Agreement" shall mean the license agreement
between JAGO, Jagotec AG, a Swiss corporation, and
INTERCARDIA dated as of the date hereof and attached hereto
as Exhibit B.
1.10 "Prototypes" shall mean the physical units of the new
formulations developed by JAGO under the Agreement using the
GEOMATRIX Technology and containing Drug.
1.11 "Territory" shall mean the entire world.
2. Conduct of Research
2.1 JAGO undertakes to use its best efforts, using the
JAGO Know-How and in close collaboration with INTERCARDIA,
to develop the Prototypes in accordance with the Feasibility
Proposal, and to provide INTERCARDIA with quarterly written
reports, and monthly written summary updates, on its
activities and the results thereof. INTERCARDIA undertakes
to provide JAGO in a timely manner with sufficient
quantities of Drug as may be reasonably determined by JAGO
and INTERCARDIA to develop the three (3) different
Prototypes as set forth in the Feasibility Proposal, Part
3.0, and to formulate sufficient Prototypes to conduct, or
have conducted by a qualified clinical research organization
("CRO") nominated by JAGO, such CRO selected and the
proposed protocol for the Preliminary Pharmacokinetic Study
agreed upon by INTERCARDIA, the Preliminary Pharmacokinetic
Study referred to in the Feasibility Proposal, Part 4.0;
provided however, that the initial dosage level of [ ]mg
specified by Part 3.2 and 4.2 of the Feasibility Proposal
may be modified by INTERCARDIA by giving written notice to
that effect to JAGO, subject to Section 3.3 below.
Furthermore, INTERCARDIA shall provide, if available to it
and requested by JAGO, such analytical
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
and testing methods relating to Drug as may reasonably be needed to
formulate and test the Prototypes. Except as otherwise mutually
agreed upon in writing, JAGO will provide all other components
which may be required to formulate, test and produce the required
Prototypes. Such components shall be pharmaceuti- cally acceptable,
suitable for administration to humans and designed to comply with
applicable FDA requirements.
2.2 Upon completion of the development of the Prototypes,
JAGO shall arrange for and conduct or have conducted by the
CRO, nominated by JAGO and agreed upon by Intercardia as set
forth in Section 2.1 above, the Preliminary Pharmacokinetic
Study of the Prototypes as required by the Feasibility
Proposal, Part 4.0.
Alternatively, Intercardia may elect, by giving
written notice to that effect to JAGO, to carry out itself
such Preliminary Pharmacokinetic Study at its own cost and
expense and under its own responsibility. In the event
Intercardia so elects, Sections 2.3 and 3.2 below shall not
apply, provided however, that (i) Intercardia shall consult
with JAGO on the design of the Preliminary Pharmacokinetic
Study and review the final protocol with JAGO, and (ii)
Intercardia shall provide JAGO with the results of the
Preliminary Pharmacokinetic Study within thirty (30) days of
its completion for JAGO's file, and (iii) JAGO shall assist
Intercardia in the evaluation of such results in order to
allow Intercardia to determine whether to continue the
development of such GEOMATRIX formulations containing Drug,
as set forth in Section 7. below, and (iv) JAGO shall have
no responsibility or liability whatsoever with respect to
such Preliminary Pharmacokinetic Study, including but not
limited, as to the availability and quality of the results
thereof.
2.3 Upon the completion of the Preliminary Pharmacokinetic
Study, JAGO shall disclose the results thereof to
Intercardia, subject to Sections 5. and 6.7 below, and JAGO
shall assist Intercardia in the evaluation of such results
in order to allow Intercardia to determine whether to
continue the development of such GEOMATRIX formulations
containing Drug, as set forth in Section 7. below.
2.4 INTERCARDIA recognizes and acknowledges that there is
no certainty as to the outcome of the feasibility study to
be performed hereunder, and that it may not necessarily
result in Prototypes which meet all of the specifications
outlined in the Feasibility Proposal, Part 2.0. INTERCARDIA
furthermore recognizes and acknowledges that the timetable
set forth in the Feasibility Proposal, Part 5.0, is an
estimate only based on JAGO's experience of similar
feasibility studies, and that JAGO does not make any
warranty or representation as to that Prototypes may be
developed and tested within the timeframes set forth in such
timetable,
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
provided that JAGO shall use its best efforts to meet the
timetables and achieve the results set forth in the Feasibility
Proposal. JAGO shall promptly inform INTERCARDIA of any material
deviations from such timetable.
2.5 In conducting the feasibility study contemplated here-
under, JAGO will at all times adhere to Good Laboratory
Practice (GLP) and Good Clinical Practice (GCP) standards
according to the respective European Union and US
guidelines, and in a manner designed to permit INTERCARDIA
to utilize the results of the feasibility study in a
applicable FDA filings for Product (as defined in Section
7.1 below).
3. Development Costs and Clinical Costs
3.1 CPEC shall bear all costs of the feasibility study to
be performed by JAGO as outlined in the Feasibility
Proposal, Part 6.1 (hereinafter referred to as "Development
Costs") in an aggregate amount of USD [ ]
([ ] United States Dollars), subject to
Section 3.3 and 3.4 below. Such Development Costs shall not
include the Clinical Costs as defined in Section 3.2 below.
3.2 In addition to the Development Costs, CPEC shall
reimburse JAGO any and all costs and expenses actually
incurred by JAGO, which costs and expenses are to be
approved in writing in advance by INTERCARDIA, in connection
with the Preliminary Pharmacokinetic Study set forth in the
Feasibility Proposal, Part 4.0, plus [ ]% ([ ] percent) to
reflect JAGO's obligation to manage and coordinate such
study (hereinafter collectively referred to as "Clinical
Costs"). The Clinical Costs so calculated shall be invoiced
by JAGO to INTERCARDIA and shall include sufficient detail
(including the CRO invoice) to enable INTERCARDIA to verify
the contents thereof. INTERCARDIA recognizes and acknow-
ledges that the amount of Clinical Costs as shown in the
Feasibility Proposal, Part 6.2, is an estimate only based on
JAGO's experience of similar feasibility studies, and that
JAGO does not make any warranty or representation as to that
the Preliminary Pharmacokinetic Study may be conducted for
such amount.
3.3 In the event that Intercardia requests a change in the
initial dosage level as outlined in section 2.1 above, CPEC
undertakes to bear and reimburse to JAGO any and all
pre-approved additional costs and expenses incurred or
caused by such change of the initial dosage level.
3.4 In the event that Intercardia requires the development
and testing of additional dosage strength(s) of the Drug
contained in the Prototypes to be developed under the
Agreement pursuant to the Feasibility Proposal, Part 3.2, or
in the event that additional preliminary pharmacokinetic
studies for any Prototype will be necessary or desirable,
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
any costs for such additional development and/or studies
shall be borne by CPEC, the amount of which shall be
negotiated by the Parties in good faith and be agreed upon
in a respective written protocol in advance of CPEC
incurring any liability therefore.
4. Payments to JAGO
4.1 CPEC shall pay to JAGO the Development Costs and the
Clinical Costs as set forth in Section 3.1 and 3.2 above
pursuant to the Schedule of Payments in the Feasibility
Proposal, Part 7.0, subject to any advance approvals
required of INTERCARDIA.
4.2 In the event that a request of Intercardia for change
of the initial dosage level incurs or causes additional
costs and expenses to JAGO as outlined in Section 3.3 above,
then any and all such additional costs and expenses shall be
separately invoiced by JAGO to INTERCARDIA. Any and all such
invoices shall be paid by INTERCARDIA within thirty (30)
days of receipt of such invoice(s), if any.
4.3 In the event that, pursuant to Section 3.4 above,
Intercardia requests the development and testing of
additional dosage strength(s), or in the event that
additional preliminary pharmacokinetic studies for any
Prototype will be necessary or desirable, the Schedule of
Payments in the Feasibility Proposal, Part 7.0, shall be
applied according to the payment of any additional costs
agreed upon by the Parties, provided that the first payment
shall be made upon Intercardia's request for development of
any additional dosage strength or the mutual execution of
the protocol referred to in Section 3.4 above, respectively.
4.4 In the event that upon completion of the Preliminary
Pharmacokinetic Study any invoice(s) issued by JAGO with
respect to the Preliminary Pharmacokinetic Study show an
amount in excess of the amount paid by CPEC to JAGO on
account of Clinical Costs pursuant to Section 4.1 above,
CPEC undertakes to pay to JAGO any such excess amount(s)
within thirty (30) days as of its receipt of the respective
invoice(s). In the event that upon completion of the
Preliminary Pharmacokinetic Study any invoice(s) issued by
JAGO with respect to the Preliminary Pharmacokinetic Study
show an amount of less than the amount actually paid by CPEC
to JAGO on account of Clinical Costs for any dosage
strength, then JAGO shall repay any such amount(s) overpaid
by CPEC within thirty (30) days of the completion of the
Preliminary Pharmacokinetic Study.
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
5. Confidentiality
5.1 During the term of the Agreement and in the course of
the development work hereunder, it may be necessary for a
Party hereto to disclose to the other Party, orally or in
writing, certain Confidential Information which the
disclosing Party considers to be highly confidential and
proprietary. Each Party hereto, as the recipient of any such
Confidential Information, agrees to hold in strict
confidence and not to use, except for purposes of the
Agreement, all Confidential Information obtained from the
other Party during the term of the Agreement.
5.2 The obligations of confidentiality and non-use
contained in this Section 5. shall not extend and apply to
Confidential Information that:
(a) is in or enters the public domain without
breach of the Agreement; or
(b) can be shown to have been known to the
receiving Party prior to disclosure under the Agreement;
or
(c) is disclosed, without restriction, by a third
party having the right to disclose the same; or
(d) is required to be disclosed by a judicial or
administrative authority of competent jurisdiction after
maximum practical notice to the originally disclosing
Party; or
(e) is disclosed to actual or potential investors,
corporate partners and/or licensee(s) of either Party,
provided (i) that such parties are bound by obligations
of confidentiality and non-use which are substantially
the same as those set forth in this Section 5. and which
are broad enough to cover any disclosure of Confidential
Information received from the other Party hereunder; and
(ii) that no Confidential Information disclosed by the
other Party may be disclosed to any such party, whose
primary business or activities are in direct competition
with the activities of the originally disclosing Party.
5.3 Confidential Information shall be disclosed by
INTERCARDIA or JAGO only to those of their employees who
have a need to know such Confidential Information for the
purposes of the Agreement. Furthermore, INTERCARDIA and JAGO
may also disclose Confidential Information to consultants
hired by it or by both Parties, provided the such consultant
has a need to know and has previously signed a
Confidentiality Agreement which contains substantially the
same obligations of confidentiality and non-use as set forth
in this Section 5. and which is broad enough to cover any
disclosures of Confidential Information.
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
5.4 In the event of termination or expiration of the Agreement,
except as may otherwise be agreed upon by the Parties in any
subsequent agreement, each Party shall immediately return to the
other Party all of the Confidential Information received in
connection with the Agreement, including every and all copies made
thereof, save for one copy of each item of Confidential
Information, which may be retained in the legal department or
lodged with the legal advisers of the receiving Party exclusively
in order to provide a record of Confidential Information disclosed
and to so determine the receiving Party's obligations under the
Agreement.
5.5 The obligations of confidentiality and non-use
contained in this Section 5. shall survive the expiration or
termination of the Agreement for any reason for a period of
5 (five) years commencing upon the Expiration Date or
effective date of such termination, unless otherwise agreed
upon by the Parties in any subsequent agreement.
5.6 Either Party hereto shall be entitled to seek
injunctive remedies and relief against the other Party and
third parties for any breach or threatened breach of any of
these confidentiality and non-use provisions. Furthermore,
JAGO or INTERCARDIA shall have the right to terminate the
Agreement pursuant to Section 9.2 (d) below upon the
occurrence of a breach of any of these confidentiality and
non-use obligations by the other Party, provided that prior
to such termination, the Parties shall consult on such
breach and discuss the materiality thereof, whereby such
consultation shall have no effect whatsoever on the right of
the non-breaching Party to terminate the Agreement.
6. Ownership Rights
6.1 Nothing in the Agreement shall be construed as
granting INTERCARDIA any right in any of the JAGO Patents,
JAGO Know-How, GEOMATRIX Technology, JAGO Inventions (as
defined below) or Confidential Information disclosed by JAGO
to INTERCARDIA.
6.2 Nothing in the Agreement shall be construed as
granting JAGO any right in any of the INTERCARDIA Patents,
INTERCARDIA Know-How, INTERCARDIA Inventions (as defined
below) or Confidential Information disclosed by INTERCARDIA
to JAGO.
6.3 All inventions, innovations or ideas whether or not
patentable developed during the term of the Agreement or as
a direct result of the work conducted by JAGO under the
Agreement related to formulation technology, including but
not limited to JAGO Know-How, JAGO Patents, GEOMATRIX
Technology or Confidential Information of JAGO (hereinafter
collectively referred to as "JAGO Inventions") shall
exclusively be owned by JAGO.
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
6.4 All inventions, innovations or ideas whether or not
patentable developed during the term of the Agreement or as a
direct result of the work conducted by JAGO under the Agreement
which are not JAGO Inventions (hereinafter collectively referred to
as "INTERCARDIA Inventions") shall exclusively be owned by
INTERCARDIA.
6.5 INTERCARDIA shall not, directly or indirectly through
its officers, directors, employees, agents, consultants,
Affiliates or other controlled or associated third parties,
acquire any proprietary interest in any of the JAGO Patents,
JAGO Know-How, GEOMATRIX Technology, Confidential
Information disclosed by JAGO or JAGO Inventions, if any,
except as set forth in the License Agreement.
6.6 JAGO shall not, directly or indirectly through its
officers, directors, employees, agents, consultants,
Affiliates or other controlled or associated third parties,
acquire any proprietary interest in any of the INTERCARDIA
Patents, INTERCARDIA Know-How, Confidential Information
disclosed by INTERCARDIA or INTERCARDIA Inventions, if any.
6.7 Notwithstanding anything contained in this Section 6.,
but always subject to Section 5. above, INTERCARDIA shall be
entitled to use internally and for the purposes of required
reporting to any regulatory authority all data, results and
Prototypes developed during the course of the Agreement by
JAGO related to GEOMATRIX Technology in order to (i) allow
INTERCARDIA to decide whether to continue with any further
development and testing of the Prototypes developed under
the Agreement and/or (ii) eventually to negotiate and enter
into subsequent agreements with JAGO as further set forth in
Section 7. below.
7. Subsequent Agreements
7.1 Should the results of the feasibility study
contemplated under the Agreement appear positive,
INTERCARDIA may, at its sole discretion, elect by written
notice to JAGO prior to the Expiration Date (as defined in
Section 9.1 below) to continue development with JAGO of
product(s) based on the Prototypes developed hereunder
(hereinafter referred to as "Product(s)"). Such further
development will entail the Forthcoming Steps as outlined in
the Feasibility Proposal, Part 8.0. Should INTERCARDIA elect
to continue development of Product(s), JAGO agrees to
conduct the respective further development work for
INTERCARDIA pursuant to a development agreement, which shall
contain usual and customary terms of such arrangements and
shall be negotiated by the Parties in good faith at the
appropriate time.
7.2 As of the date hereof the Parties have, together with
Jagotec AG, entered into the License Agreement providing for
a license under the JAGO Patents and the JAGO Know-How
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
granted by JAGO and Jagotec AG to INTERCARDIA to make, have
made, use market, distribute and sell Product(s) subject to
and under the terms and conditions set forth in the License
Agreement.
8. Exclusivity
8.1 In the event that the results of the Feasibility Study
contemplated hereunder show that any Prototype developed
hereunder meets the specifications outlined in the
Feasibility Proposal, Part 2.0 (and as eventually amended by
mutual agreement by the Parties), and INTERCARDIA elects to
continue the development of such GEOMATRIX formulation
containing Drug as set forth in Section 7.1 above only for
the territory of the United States of America, JAGO
undertakes not to develop a GEOMATRIX formulation containing
Drug in the Territory during a period of [ ] years
after the date of the first approval of BUCINDOLOL in any
major European market.
8.2 In the event that the results of the Feasibility Study
contemplated hereunder show that any Prototype developed
hereunder meets the specifications outlined in the
Feasibility Proposal, Part 2.0 (and as eventually amended by
mutual agreement by the Parties), and INTERCARDIA elects to
continue the development of such GEOMATRIX formulation
containing Drug as set forth in Section 7.1 above only in
the territory of any European country, JAGO undertakes not
to develop a GEOMATRIX formulation containing Drug in the
Territory during a period of [ ] year as from the lapse
of the data exclusivity period set forth in Section 5.5
above.
8.3 In the event that the results of the Feasibility Study
contemplated hereunder show that any Prototype developed
hereunder meets the specifications outlined in the
Feasibility Proposal, Part 2.0 (and as eventually amended by
mutual agreement by the Parties), and, notwithstanding such
results, INTERCARDIA does not elect to continue the
development of Product as set forth in Section 7.1 above,
JAGO upon six (6) months prior written notice to INTERCARDIA
shall be entirely free to develop a GEOMATRIX formulation
containing Drug anywhere in the Territory itself and/or in
cooperation with a third party, unless INTERCARDIA pays to
JAGO the amount of USD [ ] ([ ] United
States Dollars) within one-hundred-twenty (120) after
receipt of JAGO's notice referred to above, in which case
JAGO undertakes not to develop a GEOMATRIX formulation
containing Drug (i) in the territory of the United States of
America during a period of [ ] year as from the lapse of
the data exclusivity period as set forth in Section 5.5
above, and (ii) in the territory of any European country
during a period of [ ] years after the first
approval of BUCINDOLOL in any major European market.
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JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
8.4 Notwithstanding anything to the contrary in this
Agreement, JAGO shall not be entitled to use at any time or
under any circumstances any of the scientific information,
data, clinical results, proprietary information of
INTERCARDIA or any other information which is made available
to JAGO or comes in the possession of JAGO in connection
with the performance of its duties hereunder during the term
hereof, other than JAGO Inventions as defined in Section 6.3
above. In addition, nothing contained in this Section 8.
shall be construed to grant to JAGO any right, title,
interest or license on the Drug or any Confidential
Information of INTERCARDIA, INTERCARDIA Patents or
INTERCARDIA Know-How, and JAGO shall in no case enter into
any agreement or take any action in connection with its
rights under this Section 8. which are in derogation of or
infringe upon INTERCARDIA Patents, INTERCARDIA Know-How or
any other information or data gained by JAGO in connection
with the performance of its duties hereunder, other than
JAGO Inventions as defined in Section 6.3 above.
9. Term and Termination
9.1 The Agreement, unless terminated earlier pursuant to
Section 9.2 below, shall expire sixty (60) days as of
INTERCARDIA's receipt of the results of the Preliminary
Pharmacokinetic Study (the "Expiration Date"). The Agreement
may be extended beyond the Expiration Date by mutual
agreement of the Parties in writing.
9.2 During the entire term of the Agreement, either Party
may terminate the Agreement by giving written notice to the
other Party upon the occurrence of any of the following
events:
(a) the other Party is in default or in breach of
a term or provision hereof and such default or breach
continues and is not remedied within thirty (30) days
upon the other Party's written request to remedy such
default or breach; or
(b) the other Party goes into liquidation,
voluntarily or otherwise, other than for the sole
purpose of reorganization, or goes into bankruptcy or
makes an assignment for the benefit of creditors, or in
the event of a receiver being appointed of the other
Party's property or parts thereof; or
(c) INTERCARDIA determines in its sole discretion
not to proceed with the next phase of the feasibility
study as set forth in the Feasibility Proposal; or
(d) in accordance with Section 5.6 above.
- 11 -
<PAGE>
JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
9.3 The expiration or earlier termination of the
Agreement shall be without prejudice to any rights and
obligations of either Party accrued prior to the effective
date of such expiration or earlier termination. It is
understood and agreed by the Parties that Sections 4., 5.,
6., 8., 9. and 10. of the Agreement shall survive its
expiration or termination and remain in full force and
effect.
10. Miscellaneous Provisions
10.1 Waivers: A waiver of a breach or default under the
Agreement shall not be a waiver of any other or subsequent
breach or default. The failure or delay by either Party in
enforcing compliance with any term or condition of the
Agreement shall not constitute waiver of such term or
condition unless such term or condition is expressly waived
in writing.
10.2 Captions: Captions contained in the Agreement are for
reference purposes only and do not constitute any part of
the Agreement.
10.3 Force Majeure: Neither Party shall be held in breach
of the Agreement by any reason of acts or omissions caused
by any Act of God or other causes beyond the control of the
Parties. The Parties shall use due diligence to remove any
such causes and to resume performance under the Agreement as
soon as it is reasonably feasible.
10.4 Binding Agreement: The Agreement shall be binding upon
and inure to the benefit of the Parties hereto, their
successors and permitted assigns.
10.5 Assignment: The Agreement and the rights and
obligations hereunder, except as explicitly otherwise
provided in the Agreement, shall not be assignable by either
Party, other than to an Affiliate of such Party, without the
prior written consent of the other Party, provided, however,
that either Party may, without such consent, assign the
Agreement and its rights and obligations hereunder in
connection with the transfer or sale of all or substantially
all of its business, or in the event of its merger,
consolidation, change in control or similar transaction. Any
permitted assignee shall assume all obligations of its
assignor under the Agreement.
10.6 Separate Entities: Nothing in the Agreement shall
constitute or be deemed to constitute a partnership between
the Parties hereto or constitute or be deemed to constitute
either Party as an agent of the other for any purpose
whatsoever and neither Party shall have the authority or
power to bind the other Party, or to contract in the name of
and create a liability against the other Party in any way or
for any purpose.
- 12 -
<PAGE>
JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
10.7 Notices: All notices which are required to be given or
submitted pursuant to the Agreement shall be in writing (in the
English language) and delivered personally, sent by international
courier, or by confirmed facsimile transmission, to the addresses
set forth below or to such other address as JAGO or INTERCARDIA may
from time to time designate.
If to JAGO: Jago Pharma AG
Eptingerstrasse 51
CH-4132 Muttenz, Switzerland
Attn.: Dr. Jacques Gonella
with copy to: Rinderknecht Glaus & Stadelhofer
Beethovenstrasse 7
P.O. Box 4451
CH-8022 Zurich, Switzerland
Attn.: Dr. Thomas M. Rinderknecht, Esq.
If to
Intercardia,
CPEC or
INTERCARDIA: Intercardia Inc.
3200 Chapel Hill Road/Nelson Highway
Cape Fear Building, Suite 101
P.O. Box 14287
Research Triangle Park, NC 27709,
U.S.A.
Attn.: President
with copy to: Wyrick, Robbins, Yates & Ponton L.L.P.
4101 Lake Boone Trail, Suite 300
Raleigh, NC 27607, U.S.A.
Attn.: Larry E. Robbins, Esq.
10.8 Governing Law: The Parties hereto agree that the
Agreement, all transactions affected hereunder and all
relationships between the Parties in this connection shall
be construed under and be governed in all respects by the
laws of Switzerland without reference to the principles of
conflicts of laws thereof.
10.9 Entire Agreement: The Agreement, together with the
Exhibits referred to herein and attached hereto, represents
the entire understanding of the Parties with respect to the
subject matter hereof, and supersede all proposals or
agreements, oral or written, and all other communications
between the Parties related to the subject matter of the
Agreement, including without limitation any representations
or warranties made by either Party hereto or its represen-
tatives. The Agreement may not be amended or modified except
in a writing duly executed by the Parties hereto.
- 13 -
<PAGE>
JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
10.10 Counterparts: The Agreement may be executed in counterparts,
each one of which shall be considered an original, and all of
which, when taken together, shall constitute one and the same
instrument.
11. Dispute Resolution and Arbitration
11.1 In the event of any dispute arising between the
Parties concerning this Agreement, JAGO and INTERCARDIA
agree that in the first place they shall meet for good faith
discussions in an attempt to negotiate an amicable solution.
11.2 Any dispute arising between the Parties out of or in
connection with this Agreement, or the interpretation,
breach or enforcement thereof, which cannot be amicably
resolved pursuant to Section 11.1 above within 2 (two)
months as from the first appearance of such dispute, shall
be finally resolved by binding arbitration. Whenever a Party
shall decide to institute arbitration proceedings, it shall
give written notice to that effect to all of the other
Parties. Any arbitration hereunder shall be conducted under
the Rules of Conciliation and Arbitration of the
International Chamber of Commerce. Any such arbitration
shall be conducted in the English language by a panel of
three (3) arbitrators appointed in accordance with such
rules, and shall be held in a place, other than a place in
the United States of America or Switzerland, to be
determined by the ICC Court of Arbitration in accordance
with such rules. The arbitrators shall have the authority to
grant specific performance, and to allocate among the
parties the costs of arbitration in such equitable manner as
they determine. Judgment upon the award so rendered may be
entered in any court having jurisdiction or application may
be made to such court for judicial acceptance of any award
so rendered and an order of enforcement, as the case may be.
Whether a claim, dispute or other matter in question would
be barred by the applicable statute of limitations, which
also shall apply to any arbitration under this section,
shall be determined by binding arbitration pursuant to this
section.
11.3 Notwithstanding anything contained in this Section
11., either Party may seek preliminary or injunctive
measures or relief in any competent court having
jurisdiction.
[THE BALANCE OF THIS PAGE
IS LEFT BLANK INTENTIONALLY]
- 14 -
<PAGE>
JAGO PHARMA AG/INTERCARDIA INC./CPEC INC. FEASIBILITY STUDY AGREEMENT
The Agreement is executed by JAGO Pharma AG, Intercardia Inc. and
CPEC Inc., by their duly authorized representatives, as of the
dates of signature shown below, and shall be effective as of the
date first written above.
JAGO PHARMA AG
(signature of Dr. Jacques Gonella
Muttenz, 10 April 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Dr. Jacques Gonella
Title: President
INTERCARDIA INC.
Research Triangle Park, NC (signature of Clayton I. Duncan
April 23, 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Clayton I. Duncan
Title: President & CEO
CPEC INC.
Research Triangle Park, NC (signature of Clayton I. Duncan
April 23, 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Clayton I. Duncan
Title: President & CEO
- 15 -
<PAGE>
Exhibit A
JAGO Pharma AG
FEASIBILITY PROPOSAL
FOR THE DEVELOPMENT OF A QD
BUCINDOLOL GEOMATRIX (REGISTER MARK) TABLET
SEPTEMBER 27, 1995
1.0 BACKGROUND
Bucindolol is a molecule that is subject to a large first-pass effect with
an average bioavailability of [ ]%. It is extensively metabolized with less
than [ ]% eliminated unchanged in the urine after a single dose. There are
indications that one or more [ ] may be active. The drug exhibits
considerable [
] values reported in some studies).
Although [ ] has been reported, there is little support for this
claim due to the poor study design and/or execution (parallel groups of
hypertensive patients and limited plasma sampling in the case of one study
and thawed samples with the majority of concentrations below the limit of
quantification of the assay in the other).
After review of the pharmacokinetic data, JAGO does not recommend conducting
a [ ] study with the [ ] product. Such a study will only
be useful to the Geomatrix (register mark) product development, if the
Geomatrix (register mark) prototype selected from the Feasibility Study
is used in the [ ] study. No further data is required for the
[ ] product. Those contained in [ ] form
an entirely adequate foundation on which to base our Geomatrix (register
mark) development.
2.0 OBJECTIVE OF THE FEASIBILITY STUDY
The objective of the Feasibility Study is to develop a once-daily
Geomatrix (register mark) tablet of Bucindolol. Two concepts of drug
release will be pursued; one a [ ] profile to match as
closely as possible the release profile of a [ ] mg [
], dosed [ ] daily; and the other, a [ ] to provide
[ ] profiles.
- -------------------------------------------------------------------------------
(Letter head footing appears at the bottom of the page and reads as follows:)
100 Westlakes Drive * Berwyn, PA 19312-2409
(610) 640-9100 * Fax (610) 640-9558
Eptingerstrasse 51 * 4132 Muttenz/Switzerland
(41) 61-4675555 * Fax (41) 61-4675500
<PAGE>
September 27, 1995
JAGO Pharma AG
3.0 PHARMACEUTICAL DEVELOPMENT
[ ] prototypes will be developed for testing in a Pilot Pharmacokinetic
Study. The development of the prototype formulations will include the
following:
3.1 Adaptation of the analytical methods provided by Intercardia for their
use with the Geomatrix (register mark) technology;
3.2 Initial development of a [ ] mg tablet; (Eventually, the required
dosage strengths may include [ ] and [ ] mgs.)
3.3 Determination of the [ ] profiles of the selected
prototypes using the [ ] system under different conditions.
4.0 PRELIMINARY PHARMACOKINETICS STUDY*
(*This study to be performed by JAGO.)
The objectives of this study are (1) to verify whether one or more of the
selected prototypes corresponds to the desired formulation; and (2) to
determine the relationship between [ ] and [
]. Its design will include the following:
4.1 [ ] volunteers;
4.2 [ ] design - [ ] different Geomatrix (register
mark) Bucindolol [ ] mg prototypes and a [ ] mg [
];
4.3 [ ] arm - Bucindolol in [ ] solution;
4.4 Harvest of [ ] blood samples per subject and per session;
4.5 Determination of the Bucindolol [ ] levels by a validated method;
4.6 Adherence to the GLP and GCP EC guidelines.
5.0 TIMING
5.1 Development of the preliminary prototypes ...............[ ] Months
5.2 Pilot pharmacokinetic study - completed ...................[ ] Months
5.3 "GO/NO-GO" DECISION BY INTERCARDIA
- -------------------------------------------------------------------------------
[EH2777] Page 2 of 3
<PAGE>
September 27, 1995
JAGO Pharma AG
6.0 DEVELOPMENT COSTS
(US $)
6.1 Pharmaceutical development................................. $[ ]
6.2 Pilot pharmacokinetic study (cost + [ ]%) Estimate:....... $[ ]
--------
TOTAL...................................................... $[ ]
6.3 "GO/NO-GO" DECISION BY INTERCARDIA
7.0 SCHEDULE OF PAYMENTS
(US $)
7.1 Upon signing of Feasibility Agreement....................... $[ ]
7.2 At the start of production for pilot pharmacokinetic study.. $[ ]
7.3 At the start of the first pilot pharmacokinetic study....... $[ ]
7.4 Upon receipt of the pilot pharmacokinetic results........... $ [ ]
--------
TOTAL....................................................... $[ ]
8.0 FORTHCOMING STEPS
8.1 Definition and development of final dosage strength.......... JAGO
8.2 Validation and manufacturing scale-up........................ JAGO
8.21 Validation of in-process procedures and controls.
8.22 Development and optimization of the production process for
large-scales, high-speed manufacturing
8.23 Validation of analytical methods.
8.24 Manufacture of [ ] batches.
8.3 Pivotal clinical trials.......................... INTERCARDIA OR JAGO
8.4 Filing of NDA.................................... INTERCARDIA OR JAGO
- -------------------------------------------------------------------------------
[EH2777] Page 3 of 3
<PAGE>
EXHIBIT B
LICENSE AGREEMENT
This LICENSE AGREEMENT (this "Agreement"), made as of the 15th day
of April 1996, is entered into between JAGO Pharma AG, a Swiss
corporation having its place of business at Eptingerstrasse 51, 4132
Muttenz, Switzerland (hereinafter referred to as "JAGO Pharma"),
Jagotec AG, a Swiss corporation, having its place of business at
Seestrasse 47, 6052 Hergiswil, Switzerland (hereinafter referred to
as "Jagotec"; JAGO Pharma and Jagotec hereinafter collectively re-
ferred to as "JAGO") and Intercardia Inc., a Delaware corporation
having its place of business at 3200 Chapel Hill Road/Nelson
Highway, Cape Fear Building, Suite 101, Research Triangle Park, NC
27709, U.S.A. (hereinafter referred to as "Intercardia"), and CPEC.
Inc., a Nevada corporation having its place of business at Suite
1100, 300 South Fourth Street, Las Vegas, Nevada 89101, U.S.A.
(hereinafter referred to as "CPEC"; Intercardia and CPEC hereinafter
collectively referred to as "INTERCARDIA").
RECITALS
WHEREAS, JAGO Pharma and INTERCARDIA have entered as of the date
hereof into the Feasibility Agreement (as defined below), which
Feasibility Agreement set forth the terms under which JAGO Pharma
would attempt to develop a once-daily tablet containing the molecule
BUCINDOLOL for INTERCARDIA; and
WHEREAS, in connection with the Feasibility Agreement Jagotec agreed
to grant INTERCARDIA a license to Know-How, GEOMATRIX(R)* Technology
and Patents (as defined below) to develop, make, have made, use,
market, distribute and sell pharmaceutical products based upon the
Prototypes developed under the Feasibility Agreement, under the
terms and conditions set forth below;
NOW, THEREFORE, in consideration of the above premises and the
mutual covenants and agreements set forth herein, the Parties hereby
agree as follows:
Article 1. Definitions
As used in this Agreement, the following words and phrases shall
have the following meanings:
* GEOMATRIX is a registered trademark of the Jago Group of Companies
<PAGE>
1.1 "Affiliate" of a Party hereto shall mean any entity, which
controls, is controlled by, or is under common control with
such Party. For purposes of this definition, a Party shall be
deemed to control another entity if it owns or controls,
directly or indirectly, more than fifty percent (50%) of the
voting equity of another entity (or other comparable
ownership interest for an entity other than a corporation) or
if it has management control of the other entity; provided
however, that Interneuron Pharmaceuticals Inc. (hereinafter
referred to as "Interneuron") shall be excluded from this
definition of Affiliates with respect to INTERCARDIA.
1.2 "Competitive Product" shall mean any pharmaceutical
composition or product, other than Product, which applies a
controlled-release technique or technology competitive to the
GEOMATRIX Technology, which contains Drug as the main active
ingredient, and which has been approved for the same
indications as Product.
1.3 "Drug" shall mean BUCINDOLOL.
1.4 "Effective Date" shall mean the day on which Jagotec receives
the payment from CPEC as set forth in Article 6.1 (i) below.
1.5 "FDA" shall mean the U.S. Federal Food and Drug Admini-
stration and any successor agency thereof.
1.6 "Feasibility Agreement" shall mean the feasibility agreement
entered into by and between JAGO Pharma and INTERCARDIA on
even date herewith.
1.7 "GEOMATRIX Technology" shall mean JAGO's oral controlled drug
release delivery and related technology which utilizes a
hydrophilic drug-containing matrix tablet which controls the
release of the drug through the use of one or more barrier
layers, together with all improvements thereon and thereto.
1.8 "Know-How" shall mean all of JAGO's information and data,
which are not generally known including, but not limited to,
trade secrets, patent claims and related information not yet
disclosed to the public, formulas, procedures, protocols,
techniques and results of experimentation and testing which
relate to the GEOMATRIX Technology and/or are useful and/or
necessary to develop, make, use or sell products, including
Product, using the GEOMATRIX Technology, to the extent
available and at the free disposition of JAGO.
1.9 "NDA" shall mean any New Drug Application filed with the FDA,
by or for INTERCARDIA requesting authorisation to market or
sell Product in the United States of America.
-2-
<PAGE>
1.10 "Net Sales" shall mean the gross amount invoiced for Product
sold by INTERCARDIA, its Affiliates or sublicensees to any
customer other than INTERCARDIA's Affiliates or sublicensees
in the Territory, less (a) returns, discounts, rebates,
chargebacks, credits, freight, insurance and similar
customary deductions and allowances (including customary bad
debt allowances) actually credited in accordance with general
customary trade practises, and (b) rebates or similar
payments made by INTERCARDIA or its Affiliates or
sublicensees to independent third parties in connection with
or related to the purchase or reimbursement of Product by any
such parties either directly from INTERCARDIA, its Affiliates
or sublicensees or by, from or through distributors, and (c)
sales, use, value added and other taxes (but excluding any
income taxes) incurred and actually paid by INTERCARDIA or
its Affiliates or sublicensees to a government authority on
the sale of Product. For the avoidance of doubt it is hereby
clarified that any and all sales of Product to Interneuron
and/or any of its Affiliates shall be included in this
calculation of Net Sales, provided that INTERCARDIA
undertakes that all such sales of Product to Interneuron are
made on an arm's-length-basis and under terms and conditions
similar to those applied to independent customers of
INTERCARDIA.
1.11 "Patents" shall mean all patent applications heretofore or
hereafter filed or having legal force in any country of the
Territory owned by or licensed to JAGO, which claim the
GEOMATRIX Technology or the process of manufacture by use of,
or the use of, the GEOMATRIX Technology, including without
limitation the patents and patent applications listed in
Schedule 1 attached hereto, together with all patents that in
the future issue therefrom in any country of the Territory,
and together with all inventors certificates, utility models,
supplementary protection certificates, divisionals,
continuations, continuations- in-part, reissues, renewals,
extensions, substitutions, confirmations or additions to any
such patents or patent applications.
1.12 "Phase III Clinical Trials" shall mean large scale clinical
trials in human patients the primary goal of which is to
establish Product efficacy (and chronic safety) according to
regulatory agency registration studies.
1.13 "Product" shall mean a pharmaceutical composition
containing Drug as the sole active ingredient which
incorporates, is based on, uses or is derived by use of the
GEOMATRIX Technology and/or Know-How or which falls within
the scope of the claims of any of the Patents.
1.14 "Prototypes" shall mean the physical units of the new
formulations developed by JAGO under the Feasibility
Agreement using the GEOMATRIX Technology and containing Drug.
1.15 "Territory" shall mean the entire world.
-3-
<PAGE>
Article 2. Grant of License
2.1 Effective as of the Effective Date, Jagotec grants to
INTERCARDIA, and INTERCARDIA accepts, the exclusive and
sublicenseable right and license (hereinafter referred to as
the "License") to develop, make, have made, use, distribute,
market and sell the Product(s) in the Territory and to use
the Patents, GEOMATRIX Technology and Know-How in connection
with the License exclusively for that purpose subject to the
payment of royalties pursuant to Article 3. and the milestone
payments pursuant to Article 6. below.
2.2 For any countries of the Territory where Patents were or will
be registered prior to or on the Effective Date (hereinafter
referred to as "Patent-Countries"), the Licence shall be
deemed to be a patent and know-how license; for the countries
of the Territory where Patents have been neither registered
nor applied for prior to the Effective Date (hereinafter
referred to as "Non-Patent-Countries"), the Licence shall be
deemed to be a know-how license only. The royalty payable by
INTERCARDIA to Jagotec for Patent-Countries and
Non-Patent-Countries shall be calculated as provided for in
Article 3. below.
2.3 INTERCARDIA shall use commercially reasonable efforts to
commercialize the Product in the United States of America,
and elsewhere in the Territory in accordance with good
business, legal, medical and scientific judgement reasonably
applied in Intercardia's sole discretion.
2.4 Notwithstanding anything in this Agreement, INTERCARDIA shall
not sub-license any right and license with respect to
manufacturing Product(s) granted hereunder to any third party
whose research and development activities are primarily based
on controlled-release formulation technology and/or are in
direct competition with JAGO's activities. INTERCARDIA shall
continue to be bound by all terms and provisions under this
Agreement throughout its term. In case that INTERCARDIA
sublicense rights and/or the License to any sublicensees,
such sublicensees shall assume in writing any and all of
INTERCARDIA's obligations and undertakings under this
Agreement related to such sublicense, including, but not
limited to its confidentiality obligations set forth in
Article 12. below. INTERCARDIA shall provide Jagotec promptly
with appropriate information on any of its sublicensees and
copies of all agreements with such sublicensees.
2.5 Within thirty (30) days of the Effective Date, JAGO shall
provide INTERCARDIA with all Know-How necessary for the
exercise by INTERCARDIA of its rights hereunder not yet
provided under the Feasibility Agreement or any subsequent
agreement provided for in Section 7.1 of the Feasibility
Agreement. JAGO shall thereafter continue to promptly provide
INTERCARDIA with all Know-How developed after the Effective
Date.
-4-
<PAGE>
2.6 During the term of this Agreement, JAGO shall provide
Intercardia upon reasonable notice with such technical
assistance and consultation as may be reasonably requested by
INTERCARDIA to exercise its rights granted hereunder.
INTERCARDIA undertakes to reimburse JAGO for all reasonable
and documented travel-related expenses of JAGO's personnel
(including reasonable accommodation) who travel at INTER-
CARDIA's request to locations remote from such personnel's
usual working location, and INTERCARDIA shall pay to JAGO for
such services provided by JAGO's personnel an amount of USD
[ ] per man-day spent or part thereof; provided that (i) the
first [ ] man-days during each of the first two (2) years
after the Effective Date, and (ii) the first [ ]
man-days in each subsequent year thereafter until the
termination or expiration of this Agreement spent by JAGO
personnel at INTERCARDIA's request shall be provided by JAGO
at no charge to INTERCARDIA other than the obligation to reim-
burse any and all reasonable travel-related expenses referred
to above.
Article 3. Royalties
3.1 In consideration for the License granted under Article 2. of
this Agreement, CPEC agrees to pay a royalty to Jagotec
during the Royalty Term (as defined below) as follows:
(a) An amount equal to [ ]% ([ ] percent) of Net Sales up
to an aggregate amount of USD [ ] million of Net
Sales per calendar year in the Territory; plus
(b) An amount equal to [ ]% ([ ] percent) of Net Sales over
an aggregate amount of USD [ ] million of Net Sales
per calendar year in the Territory.
3.2 The Parties agree that the Royalty Term for Patent-Countries
shall be commence upon the Effective Date and shall
continue, on a Patent-Country by Patent-Country basis, until
the expiration of the last to expire of the Patents in each
such Patent-Country.
3.3 The Parties agree that the Royalty Term for
Non-Patent-Countries shall commence upon the Effective Date
and shall continue for a period of 15 (fifteen) years
thereafter.
3.4 In the event that in any Non-Patent-Country a Competitive
Product will be marketed and sold by a third party, the
Parties agree that the royalties payable by CPEC to Jagotec
for Net Sales in such Non-Patent-Country pursuant to this
Article 3. shall be reduced by [ ]% ([ ] percent). Such
reduction of the royalties shall apply as from the beginning
of the calendar year following the first commercial sale of
such Competitive Product in such Non-Patent-Country, and
shall not apply to any other Non- Patent-Country or to any
Patent-Country.
-5-
<PAGE>
3.5 For the avoidance of doubt, it is hereby clarified that the
aggregate amount of Net Sales referred to in Article 3.1
above shall be calculated on any and all Net Sales of
INTERCARDIA, its Affiliates and its sub-licensees in
countries of the Territory in which the Royalty Term has not
expired in accordance with Article 3.2 in the case of
Patent-Countries, or, in the case of Non-Patent-Countries,
the Royalty Term has not expired in accordance with Article
3.3.
3.6 In recognition of the milestone payments to be made by CPEC
to Jagotec prior to the commercial sale of the Product in the
Territory pursuant to Article 6. below, the amount of royalty
payments due to Jagotec under Article 3.1 and Article 4.1
with respect to each calendar quarter shall be reduced by [ ]%
([ ] percent) (the amount of such reduction in royalty
payments with respect to each calendar quarter hereinafter
referred to as the "Reduction") until such time as the
aggregate amount of the Reductions equals [ ]% ([ ] percent)
of the aggregate amount of the milestone payments made by
CPEC to Jagotec.
Article 4. Royalty Payments and Reports
4.1 All royalties payable hereunder shall be payable on a
quarterly basis. CPEC shall remit to Jagotec within 60
(sixty) days after the end of each calendar quarter the
amount of royalty due with respect to Net Sales achieved in
the preceding quarter, beginning with the calendar quarter in
which the first commercial sale of the Product is made in any
country of the Territory. CPEC shall deliver to Jagotec,
along with such remittance of royalty payments, a detailed
statement (hereinafter referred to as the "Royalty Report")
on the Net Sales of the Product on a country-by-country basis
to which the royalty payment relates.
4.2 All Royalty Reports shall show in reasonable detail the
calculation of the aggregate amount of Net Sales and the
royalty due under this Agreement, and shall be prepared in
accordance with generally accepted accounting principles
consistently applied from applicable period to period and
shall be certified by CPEC as being so prepared, true,
accurate and correct.
4.3 Unless otherwise agreed by the Parties in writing, payments
of the royalties shall be made in United States Dollars and
to such place or account as Jagotec reasonably requests from
time to time in writing. Any conversions into United States
Dollars from the currency in which the corresponding Net
Sales for such royalties were made, are to be calculated as
of the last day of each calendar quarter preceding such
royalty payment, at the interbank exchange rate published in
the Wall Street Journal of such day.
-6-
<PAGE>
Article 5.Inspection and Audit
5.1 Jagotec's independent auditor selected in accordance with
Article 5.2 below shall have the right, upon 30 (thirty) days
prior written notice and during regular business hours, to
inspect and audit all books or accounts, documents, records,
papers and files of INTERCARDIA relating to the sales of the
Product at the corporate offices of INTERCARDIA, provided
that such right may be exercised only once during any twelve
month period. After the expiration of 24 (twenty-four) months
following the end of any calendar year, such right of
inspection for such calendar year shall cease, and the
Royalty Reports and royalty payments for such calendar year
shall be deemed final and conclusive.
5.2 If Jagotec requests that such records be so audited,
INTERCARDIA shall make such records available at its
corporate offices to an independent auditor, proposed by
Jagotec and acceptable to INTERCARDIA within 30 (thirty) days
from receipt of Jagotec's notice requesting such audit of
such records. Where the Parties are in disagreement
concerning the choice of the independent auditor, any auditor
selected from the Big Six accounting firms located in the
United States shall be deemed acceptable, so long as neither
such auditor nor any of its Affiliates is the statutory
external auditor for JAGO or Jagotec.
5.3 If the report of such independent auditor concludes that the
Net Sales of the Product as shown by any Royalty Report be
understated by [ ]% ([ ] percent) or more, CPEC shall pay all
reasonable costs associated with the audit. Otherwise the
cost of the audit shall be borne by Jagotec. In either case,
CPEC shall pay to Jagotec immediately upon receipt of the
audit report all royalties on such amounts by which the
Royalty Reports were found by the auditor to be understated,
plus interest thereon as provided for by Article 13.13 below.
Any overpayment of royalties by CPEC to Jagotec as reported
by the auditors shall be credited with interest as provided
for in Article 13.13 below against the following quarters'
remittances, until full credit thereof is received.
Article 6. Milestone Payments
6.1 As a further consideration for the License granted hereunder
and, subject to the [ ]% ([ ] percent) credit granted in
Article 3.6 above, in addition to the royalties payable by
CPEC pursuant to Article 3. above, CPEC shall pay to Jagotec
the following milestone payments:
i) USD [ ] ([ ] United States
Dollars) upon INTERCARDIA's "GO"-decision and notice to
JAGO after review of the Preliminary Pharmaco-
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kinetic Study data as set forth in Article 2.3 of the
Feasibility Agreement and as referred to in Part 6.3 of
the Feasibility Proposal;
ii) USD [ ] ([ ] United States
Dollars) upon commencement of Phase III Clinical Trials;
iii) USD [ ] ( ] United States
Dollars) upon filing of an NDA; and
iv) USD [ ] ([ ] United States Dollars) within
thirty (30) days of approval of such NDA by the FDA.
6.2 Each such milestone payment shall be made by CPEC to Jagotec
in United States Dollars to such place or account as Jagotec
reasonably requests from time to time in writing.
Article 7. Proprietary Rights and Patents
7.1 Jagotec shall retain title to and ownership of Patents,
Know-How and GEOMATRIX Technology including, but not limited
to, any and all developments and inventions relating thereto
(hereinafter collectively referred to as "IPR").
7.2 INTERCARDIA shall not, directly or indirectly, through its
officers, directors, employees, agents, Affiliates,
customers, sub-licensee(s) or other controlled or associated
third parties, acquire any proprietary interest in or other
right to any of the IPR, other than as provided in this
Agreement.
7.3 Jagotec shall be responsible for and shall control, at its
own cost, the preparation, prosecution and maintenance of all
patent applications and patents constituting Patents, and
shall keep INTERCARDIA fully and promptly informed on any
developments or changes relating thereto. During the term of
this Agreement, Jagotec shall, at its sole cost, take all
steps necessary to prosecute and maintain Patents to the
extent Jagotec deems commercially reasonable. If Jagotec
decides not to further prosecute any patent application, or
not to maintain any patent, constituting Patents, Jagotec
shall prior thereto inform INTERCARDIA of such decision in
writing. In such case, the Parties shall meet to discuss any
appropriate action with regard to such patent or patent
application, provided however, that Jagotec shall not abandon
any patent application or patent constituting Patents, by
which the Product is covered, without the prior written
consent of INTERCARDIA.
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Article 8. Infringement and Enforcement of IPR
8.1 Notification of Infringement
(a) If INTERCARDIA becomes aware of (i) any product or activity
of any kind that involves or may involve an infringement or
violation of any of the IPR; or (ii) any third-party action,
claim or dispute (including, but not limited to, actions for
declaratory judgment alleging the invalidity or
non-infringement) based upon or arising out of any of the
IPR, then INTERCARDIA shall promptly notify Jagotec in
writing of any such infringement, violation, action, claim or
dispute.
(b) If JAGO becomes aware of (i) any product or activity of any
kind that involves or may involve an infringement or
violation of any of the IPR which affects the Product; or
(ii) any third-party action, claim or dispute (including, but
not limited to, actions for declaratory judgment alleging the
invalidity or non-infringement) based upon or arising out of
IPR which affects the Product, then JAGO shall promptly
notify INTERCARDIA in writing of any such infringement,
violation, action, claim or dispute.
8.2 Enforcement of IPR
(a) Jagotec, at its sole expense, shall have the right, but not
the obligation, (i) to determine the appropriate course of
action to enforce, or otherwise abate any infringement of, or
defend any third-party actions regarding IPR, (ii) to take,
or refrain from taking, appropriate action to enforce, or
defend any third-party action regarding IPR, (iii) to control
any litigation or other enforcement action regarding IPR, and
(iv) to enter into, or permit, the settlement of any such
litigation or other enforcement action regarding IPR. Jagotec
shall keep INTERCARDIA informed on a regular basis on its
taking or refraining from taking, and the development of, any
of the foregoing actions, and shall consider, in good faith,
the interests of INTERCARDIA under this Agreement when taking
any of the foregoing actions. INTERCARDIA shall, at its own
cost, fully cooperate with Jagotec in the planning and
execution of any suit or other action to enforce or defend
third-party actions regarding IPR as reasonably required by
Jagotec.
(b) If Jagotec does not, within three (3) months, or any shorter
delay imposed by any applicable law or regulation or court or
authority having jurisdiction, after receiving notice of any
infringement or violation of IPR, or of any third-party
action, claim or dispute based upon or arising out of IPR,
commence or take an action to enforce, or otherwise abate
such infringement, or defend against such third-party action,
then INTERCARDIA shall have the right and option, but not the
obligation, at its sole expense, to
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take and control such action as it deems appropriate to
enforce, or abate the infringement of, or defend against such
third-party action, regarding IPR. INTERCARDIA shall promptly
notify Jagotec on its decision whether to exercise its option
to take and control any such suit or other action, and shall
keep Jagotec informed on a regular basis on any such suit or
other action and consider, in good faith, the interests of
Jagotec under this Agreement and in IPR when taking any of
the foregoing actions. Notwithstanding anything contained
herein, INTERCARDIA shall not settle any suit or action or
otherwise consent to an adverse judgment in such suit or
action it controls without the prior written consent of
Jagotec (not to be withheld unreasonably).
(c) The Party not controlling any such suit or other action under
this Article 8.2, upon written request of such other Party
and at its sole expense, shall be made an additional, not
controlling Party in such suit or other action, where
necessary to obtain complete relief regarding the subject
infringement or violation.
(d) All monies recovered upon the final judgment or settlement of
any suit or other action under this Article 8.2 shall be
applied as follows:
(i) to cover any and all (or pro rata where the moneys
recovered are not sufficient to cover all) (x)
costs and expenses (including attorney's fees)
incurred by the Party controlling such suit or
other action, and (y) costs and expenses
(including attorney's fees) reasonably, or upon
request of the controlling Party, incurred by the
other Party in connection with such suit or other
action, if any;
(ii) to CPEC up to an amount equal to its lost Net
Sales resulting from the subject infringement as
determined by such final judgment or settlement,
if any;
(iii) to Jagotec up to an amount equal to Royalties owed
with respect to amounts received by CPEC under the
preceding clause (ii), if any; and
(iv) the remainder, if any, to Jagotec and/or CPEC, as
the case may be, depending on the nature of the
award as determined by the court in any such
proceedings.
Article 9. Warranties
9.1 Jagotec hereby warrants that it has the full right and power
to grant the License set forth in Article 2. above in the
manner and to the extent set forth, free and clear of any
adverse assignment, grant or other encumbrances inconsistent
with such grant under this Agreement.
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<PAGE>
9.2 Nothing in this Agreement shall be construed as a
representation made, or warranty given by JAGO that any
patent will issue based upon any pending patent application
and that any patent which issues will be valid or
enforceable. Furthermore, except as specifically provided
herein, JAGO makes no representations or warranties, express
or implied, with respect to GEOMATRIX Technology and/or
Know-How, including without limitation, any warranty of
completeness, accuracy, merchantability or fitness for a
particular purpose thereof.
9.3 JAGO does not assume any responsibility and makes no
warranty, express or implied, that the use of the Patents,
Know-How or GEOMATRIX Technology or the use, distribution,
marketing or sale of Product do not infringe any third
party's patents, patent applications or other intellectual
property rights. Notwithstanding the preceding sentence, JAGO
represents and warrants that, as of the date first written
hereinabove, it is not aware and has no knowledge of any such
infringement of any third party rights. If however, during
the course of this Agreement, either Party discovers that the
use of the Patents, Know-How or GEOMATRIX Technology
hereunder, or the use, distribution, marketing or sale of
Product infringe or may infringe any third party's
intellectual property rights, it shall promptly inform the
other Party thereof and the Parties shall meet to discuss the
course of action to be taken with regard thereto.
9.4 In the event that INTERCARDIA or any of its Affiliates or
authorised sub-licensee(s), as a result of a final judgment
relating to the past or future exercise of the License, is
required to pay any royalty fee or damages to a third party
other than Jagotec, then the Royalty payments payable to
Jagotec under Article 3. above shall be reduced by [ ]
percent ([ ]%) until the aggregate amount of such reductions
in Royalties equals the aggregate amount of such royalty fee
or damages payable by INTERCARDIA to such third party. If
INTERCARDIA avails itself of the provision of this Article
9.4, INTERCARDIA shall provide Jagotec with documentary
evidence of such payments to such third party.
9.5 INTERCARDIA hereby warrants that during the term of this
Agreement it will not develop or market any product, other
than Product, covered by any of the Patents, or employing or
using any of the Know-How or GEOMATRIX Technology, unless
otherwise agreed upon in writing with JAGO.
Article 10. Product Liability
10.1 INTERCARDIA shall indemnify, defend and hold JAGO harmless
from and against any losses, claims, liabilities, costs and
expenses (including reasonable attorney's fees) that may be
imposed upon or asserted against JAGO as a result of the
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<PAGE>
manufacturing, marketing, distribution, use or sale of
Product by or on behalf of INTERCARDIA, its Affiliates,
agents or sublicensee(s), except for those losses, claims,
liabilities, costs and expenses arising from gross negligence
or intentional misconduct on the part of JAGO or to the
extent related to the GEOMATRIX Technology.
10.2 JAGO shall indemnify, defend and hold INTERCARDIA harmless
from and against any losses, claims, liabilities, costs and
expenses (including reasonable attorney's fees) that may be
imposed upon or asserted against INTERCARDIA as a result of
the manufacturing, marketing, distribution, use or sale of
Product by or on behalf of INTERCARDIA, its Affiliates,
agents or sublicensee(s) to the extent only, that such
losses, claims, liabilities, costs and expenses are directly
and exclusively related to the GEOMATRIX Technology and not
arising from gross negligence or intentional misconduct on
the part of INTERCARDIA.
10.3 INTERCARDIA shall provide JAGO with reasonable assurance and
evidence of its ability to self-insure, or shall, at its own
expense, purchase from an insurance company of its choice and
shall maintain during the entire term of this Agreement, an
appropriate and customary policy of general liability and
product liability insurance covering its responsibilities
regarding Product developed, manufactured, marketed and sold
under this Agreement and the active ingredient contained
therein and the use thereof. Upon request, INTERCARDIA shall
provide JAGO with evidence that such insurances are existing
and are maintained.
10.4 This Article 10. shall survive the termination for any reason
or expiration of this Agreement for a period of five (5)
years as from the effective date of such termination or
expiration.
Article 11. Term and Termination
11.1 Term and Expiration
(a) This Agreement shall expire on a country-by-country basis
upon the expiration of the Royalty Term for each country of
the Territory.
(b) Upon the expiration of this Agreement pursuant to Article
11.1 (a) above and payment of all fees, royalties, milestone
payments and other payments by CPEC to JAGO under this
Agreement, the License shall be deemed to be an exclusive,
perpetual, fully paid-up and royalty-free license to
INTERCARDIA for each such country of the Territory.
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<PAGE>
11.2 Termination for Cause
Prior to the Effective Date and during the entire term of
this Agreement either Party may terminate this Agreement by
giving to the other Party written notice to that effect, if
any of the following events occur:
i) the other Party is in default or in breach of a term or
provision hereof and such default or breach continues
and is not remedied within 30 (thirty) days upon the
other Party's written request to remedy such default or
breach subject to Article 13.3. below; or
ii) the other Party shall commit a breach of any of the
confidentiality provisions of Article 12. below; or
iii) the other Party goes into liquidation, voluntarily or
otherwise, other than for the sole purpose of
reorganisation, or goes into bankruptcy or makes an
assignment for the benefit of creditors, or in the
event of a receiver being appointed of the other
Party's property or parts thereof.
11.3 Effect of Termination
(a) The termination of this Agreement shall be without prejudice
to any rights and obligations of either Party accrued prior
to the effective date of termination. INTERCARDIA shall
forthwith make all payments due and outstanding to JAGO as at
the date of termination. Except as otherwise provided herein,
JAGO shall not be obliged to refund to INTERCARDIA any
payments already made by INTERCARDIA to JAGO pursuant to the
provisions of this Agreement.
(b) In the event of termination of this Agreement by JAGO
pursuant to Article 11.2 above, the License shall immedia-
tely be terminated and INTERCARDIA shall immediately refrain
from using directly or indirectly in any way the Patents,
GEOMATRIX Technology and Know-How; provided that INTERCARDIA,
its Affiliates and/or sublicensees shall have
one-hundred-eighty (180) days thereafter to sell, subject to
the royalty obligations under Article 3. above, any Products
in their inventory at the time of such termination as
promptly notified to JAGO in writing. Furthermore,
INTERCARDIA shall return to JAGO all materials, documen-
tation, information, data and other things, including
samples, furnished by JAGO to INTERCARDIA in connection with
this Agreement or the Feasibility Agreement, together with
all copies thereof, all free of any charge to JAGO. JAGO
shall have the right, but not the obligation, to use, at its
sole discretion, any and all such material for its own
purposes.
(c) In the event of termination by INTERCARDIA pursuant to
Article 11.2 above, Jagotec shall within 30 (thirty) days
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<PAGE>
as of such termination repay to INTERCARDIA any and all
milestone payments actually paid by INTERCARDIA until the
effective date of such termination, and the License shall be
deemed to be an exclusive, perpetual, fully paid-up and
royalty-free license in the Territory.
Article 12. Confidentiality
12.1 During the term of this Agreement it may be necessary for
JAGO to disclose to INTERCARDIA information relating to
GEOMATRIX Technology and Know-How, or relating otherwise to
the business or affairs of JAGO, which JAGO considers to be
proprietary and confidential. Likewise, INTERCARDIA may be
required to disclose to JAGO information concerning Drug or
its business methods and strategy which INTERCARDIA consi-
ders to be similarly proprietary and confidential (collec-
tively hereinafter referred to as "Confidential
Information"). The Party receiving any such Confidential
Information agrees to hold in strict confidence and not use,
except for the purposes of this Agreement, all Confidential
Information obtained from the other Parties during the term
of this Agreement.
12.2 The obligations of confidentiality and non-use contained in
this Article 12. shall not extend and apply to Confidential
Information that:
(a) is in or enters the public domain without breach of this
Agreement or the Feasibility Agreement;
(b) can be shown to have been known to the receiving Party
prior to disclosure under this Agreement or the
Feasibility Agreement;
(c) is disclosed to the receiving Party, without restriction,
by a third party having the right to disclose same;
(d) is required to be disclosed by a judicial or
administrative authority of competent jurisdiction after
maximum practical notice to the originally disclosing
Party;
(e) is disclosed to actual or potential investors, corporate
partners and/or licensee(s) of either Party, provided (i)
that such parties are bound by obligations of
confidentiality and non-use which are substantially the
same as those set forth in this Article 12. and which are
broad enough to cover any disclosure of Confidential
Information received from the other Party hereunder; and
(ii) that no Confidential Information disclosed by the
other Party may be disclosed to any such party, whose
primary business and activities are in direct competition
with the activities of the originally disclosing Party.
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<PAGE>
12.3 Confidential Information of the disclosing Party shall be
disclosed by the receiving Party only to those employees of
the receiving Party who have a need to know such Confidential
Information for the purpose of this Agreement. Furthermore,
the Parties may also disclose Confidential Information to
consultants hired by one or both of the Parties, provided the
receiving Party's consultant has a need to know such
Confidential Information for the purposes of this Agreement
and has prior to such disclosure previously signed a
Confidentiality Agreement with the receiving Party which
contains substantially the same obligations of
confidentiality and non-use as set forth in this Article 12.
and which is broad enough to cover disclosure of Confidential
Information from the originally disclosing Party.
12.4 The obligations of confidentiality and non-use contained in
this Article 12. shall survive the termination of this
Agreement for any reason for a period of five (5) years
commencing upon the effective date of such termination,
unless otherwise agreed upon by JAGO and INTERCARDIA in any
subsequent agreement.
12.5 The Parties shall be entitled to seek injunctive remedies and
relief against the other Party and third persons for any
breach or threatened breach of any of these confidentiality
provisions.
Article 13. Miscellaneous Provisions
13.1 Waivers: A waiver of a breach or default under this Agreement
shall not be a waiver of any other or subsequent breach or
default. The failure or delay by either Party in enforcing
compliance with any term or condition of this Agreement shall
not constitute waiver of such term or condition unless such
term or condition is expressly waived in writing.
13.2 Captions: Captions contained in this Agreement are for
reference purposes only and do not constitute any part of
this Agreement.
13.3 Force Majeure: Neither Party shall be held in breach of this
Agreement by any reason of acts or omissions caused by any
Act of God or other causes beyond the control of the Parties.
The Parties shall use due diligence to remove any such causes
and to resume performance under this Agreement as soon as it
is reasonably feasible.
13.4 Binding Agreement: This Agreement shall be binding upon and
inure to the benefit of the Parties hereto, their successors
and permitted assigns.
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<PAGE>
13.5 Assignment: This Agreement and the rights and obligations
hereunder, except as explicitly otherwise provided in this
Agreement, shall not be assignable by either Party, other
than to an Affiliate of such Party, without the prior
written consent of the other Party, provided, however, that
either Party may, without such consent, assign this
Agreement and its rights and obligations hereunder in
connection with the transfer or sale of all or substantially
all of its business, or in the event of its merger,
consolidation, change in control or similar transaction.
Notwithstanding the preceding sentence, no consent by
INTERCARDIA shall be required for the assignment by JAGO
Pharma and/or Jagotec of any right to receive any payment
payable under this Agreement. Any permitted assignee shall
assume all obligations of its assignor under this Agreement.
13.6 Separate Entities: Nothing in this Agreement shall
constitute or be deemed to constitute a partnership between
the Parties hereto or constitute or be deemed to constitute
either Party as an agent of the other for any purpose
whatsoever and neither Party shall have the authority or
power to bind the other Party, or to contract in the name of
and create a liability against the other Party in any way or
for any purpose.
13.7 Notices: All notices which are required to be given or
submitted pursuant to this Agreement shall be in writing (in
the English language) and delivered personally or sent by
international courier, or by confirmed facsimile transmis-
sion, to the addresses set forth below or to such other
address as JAGO or INTERCARDIA may from time to time
designate.
If to JAGO,
JAGO Pharma
or Jagotec: Jago Pharma AG
Eptingerstrasse 51
CH-4132 Muttenz, Switzerland
Attn.: Dr. Jacques Gonella
with copy to: Rinderknecht Glaus & Stadelhofer
Beethovenstrasse 7
P.O. Box 4451
CH-8022 Zurich, Switzerland
Attn.: Dr. Thomas M. Rinderknecht, Esq.
If to
Intercardia,
CPEC or
INTERCARDIA: Intercardia Inc.
3200 Chapel Hill Road/Nelson Highway
Cape Fear Building, Suite 101
P.O. Box 14287
Research Triangle Park, NC 27709, U.S.A.
Attn.: President
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<PAGE>
with copy to: Wyrick, Robbins, Yates & Ponton L.L.P.
4101 Lake Boone Trail, Suite 300
Raleigh, NC 27607, U.S.A.
Attn.: Larry E. Robbins, Esq.
13.8 Governing Law: The Parties hereto agree that this Agreement,
all transactions affected hereunder and all relationships
between the Parties in this connection shall be construed
under and be governed in all respects by the laws of
Switzerland without reference to the principles of conflict
of law thereof, and shall not be governed by the United
Nations Convention on Contracts for the International Sale of
Goods.
13.9 Entire Agreement: This Agreement, together with the
Feasibility Agreement and the Exhibits attached thereto,
represent the entire understanding of the Parties with
respect to the subject matter hereof, and supersede all
proposals or agreements, oral or written, and all other
communications between the Parties related to the subject
matter of this Agreement, including without limitation any
representations or warranties made by either Party hereto or
its representatives. This Agreement may not be amended or
modified except in a writing duly executed by the Parties
hereto.
13.10 Counterparts: This Agreement may be executed in counterparts,
each one of which shall be considered an original, and all of
which, when taken together, shall constitute one and the same
instrument.
13.11 Withholding Taxes: Any tax, duty or other levy paid or
required to be withheld by INTERCARDIA on account of
royalties payable to Jagotec under this Agreement shall be
deducted from the amount of royalties otherwise due.
INTERCARDIA shall secure and send to Jagotec proof of any
such taxes, duties or other levies withheld and paid by
INTERCARDIA, its Affiliates or its sublicensees for the
benefit of Jagotec.
13.12 Invalidity of Provisions: In the event that any of the terms
or provisions of this Agreement should be in conflict with
any rule of law or statutory provision or should be otherwise
unenforceable under the laws or regulations of any government
or subdivision hereof, such terms and provisions shall be
deemed stricken from this Agreement, without affecting the
validity of all other terms and provisions of this Agreement
which shall remain fully in force.
13.13 Interest: In the event any amount due and payable under this
Agreement is not paid by the due date, then the Party owing
such amount shall pay to the creditor, without being
requested by the other Party, interest on the total
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<PAGE>
outstanding amount at the rate equal to the prime rate as
published in the Wall Street Journal on the date on which
such payment falls due in United States Dollars, and adjusted
on the first day of every calendar quarter.
Article 14. Dispute Resolution and Jurisdiction
14.1 In the event of any dispute arising between the Parties
concerning this Agreement, JAGO and INTERCARDIA agree that in
the first place they shall meet for good faith discussions in
an attempt to negotiate an amicable solution.
14.2 Any dispute arising between the Parties out of or in
connection with this Agreement, or the interpretation, breach
or enforcement thereof, which cannot be amicably resolved
pursuant to Article 14.1 above within 2 (two) months as from
the first appearance of such dispute, shall be finally
resolved by binding arbitration. Whenever a Party shall
decide to institute arbitration proceedings, it shall give
written notice to that effect to all of the other Parties.
Any arbitration hereunder shall be conducted under the Rules
of Conciliation and Arbitration of the International Chamber
of Commerce. Any such arbitration shall be conducted in the
English language by a panel of three (3) arbitrators
appointed in accordance with such rules, and shall be held in
a place, other than a place in the United States of America
or Switzerland, to be determined by the ICC Court of
Arbitration in accordance with such rules. The arbitrators
shall have the authority to grant specific performance, and
to allocate among the parties the costs of arbitration in
such equitable manner as they determine. Judgment upon the
award so rendered may be entered in any court having
jurisdiction or application may be made to such court for
judicial acceptance of any award so rendered and an order of
enforcement, as the case may be. Whether a claim, dispute or
other matter in question would be barred by the applicable
statute of limitations, which also shall apply to any
arbitration under this section, shall be determined by
binding arbitration pursuant to this section.
14.3 Notwithstanding anything contained in this Article 14.,
either Party may seek preliminary or injunctive measures or
relief in any competent court having jurisdiction.
[THE BALANCE OF THIS PAGE
IS LEFT BLANK INTENTIONALLY]
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This Agreement is executed by Jagotec AG, JAGO Pharma AG, Intercardia
Inc. and CPEC Inc. by their duly authorised representatives, as of the
dates of signature shown below, and shall be effective as of the
Effective Date.
JAGOTEC AG
(signature of Dr. Jacques Gonella
Muttenz, 10 April 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Dr. Jacques Gonella
Title: President
JAGO PHARMA AG
(signature of Dr. Jacques Gonella
Muttenz, 10 April 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Dr. Jacques Gonella
Title: President
INTERCARDIA INC.
Research Triangle Park, NC (signature of Clayton I. Duncan
April 23, 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Clayton I. Duncan
Title: President & CEO
CPEC INC.
Research Triangle Park, NC (signature of Clayton I. Duncan
April 23, 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Clayton I. Duncan
Title: President & CEO
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<PAGE>
Intercardia Inc. hereby executes this Agreement supplementally in order
to guarantee jointly and severally any and all payment obligations of
CPEC Inc. stated in this Agreement.
INTERCARDIA INC.
Research Triangle Park, NC (signature of Clayton I. Duncan
April 23, 1996 appears here)
- -------------------------- By: --------------------------
(Place and Date) Name: Clayton I. Duncan
Title: President & CEO
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<PAGE>
SCHEDULE 1
PATENTS (ARTICLE 1.11)
PACO 1:
Title: "System for the controlled-rate release of active
substances"
Countries: Italy: Approved: January 7, 1988, No. 1188212
(NATIONAL PATENT)
USA: Approved: June 13th 1989, No. 4.839.177
Europe: Approved: November 22, 1990, No. 0226884
Australia: Approved: July 10, 1990, No. 594992
Canada: Approved: April 7, 1992, No. 1.298.479
New Zealand: Approved: December 11, 1990, No. 218.596
Japan: Pending: filed December 19, 1986
PACO 6:
Title: "Tablets with controlled-rate release of active substances"
Countries: Italy: Approved: No. 1237904, June 18, 1993
(NATIONAL PATENT)
USA: Approved: June 6, 1995, No. 5,422,123
Europe: Approved: February 15, 1996, No. 0432607
Canada: Pending: filed December 3, 1990
Application No. 2.031.393-5
Japan: Pending: filed December 14, 1990
Application No. 410988/1990
PACO 7:
Title: "Process for preparing pharmaceutical compositions
having an increased active substance dissolution rate,
and the composition obtained"
Countries: Italy: Approved: November 16, 1994, No. 1246188
(NATIONAL PATENT)
<PAGE>
PACO 7 (cont.)
USA: 1st Application filed July 22, 1991
Application No. 07/733457
Pending: Continuation of October 11, 1994
Application No. 08/524.739,
Approved: Continuation No. 08/321,123
December 19, 1995, No. 5.476.654
Europe: Pending: filed July 22, 1991
Application No. 91112214.1
Canada: Pending: filed July 26, 1991
Application No. 2.047.944
Japan: Pending: filed July 29, 1991
Application No. 3-210407
PACO 8:
Title: "Pharmaceutical tablets releasing the active substance
after a definite period of time"
Countries: Italy: Pending: filed May 15th 1992
Application No. MI 92 A 001174
(NATIONAL PATENT)
USA: Approved: November 7, 1995, No. 5,464,633
Canada: Pending: filed May 26, 1994
Application No. 2.124.425
PACO 9:
Title: "Pharmaceutical tablet capable of liberating one or more
drugs at different release rates"
Countries: Italy: Pending: filed September 24, 1992
Application No. MI 92 A 002192
(NATIONAL PATENT)
PCT*: Pending: filed September 21, 1993
Application, No. PCT/EP93/02556,
*PCT Designated Territories: Australia, Canada, Japan, USA, New Zealand,
European Patent Territory
<PAGE>
AMENDMENT NO. 1 TO THE
AGREEMENT FOR FEASIBILITY STUDY
THIS AMENDMENT NO. 1 (the "AMENDMENT"), effective as of the 15th
day of April, 1996, made by and among JAGO Pharma AG, a Swiss
corporation, having its place of business at Eptingerstrasse 51,
CH-4132 Muttenz, Switzerland (hereinafter, together with its
Affiliates, including without limitation Jagotec AG, a Swiss
corporation, referred to as "JAGO") and Intercardia Inc., a
Delaware corporation, having a place of business at 3200 Chapel
Hill Road/Nelson Highway, Cape Fear Building, Suite 101, Research
Triangle Park, NC 27709, U.S.A. (hereinafter referred to as
"Intercardia"), and CPEC. Inc., a Nevada corporation having its
place of business at Suite 1100, 300 South Fourth Street, Las
Vegas, Nevada 89101, U.S.A. (hereinafter referred to as "CPEC";
Intercardia and CPEC hereinafter collectively referred to as
"INTERCARDIA").
WHEREAS, the Parties have entered into a Feasibility Study
Agreement (the "Agreement") effective as of 15 April 1996; and
WHEREAS, the Parties wish to amend Article 5.6 of the Agreement
for clarification reasons; and
WHEREAS, all capitalized terms used, but not defined herein, shall
have the meaning as set forth in the Agreement.
NOW THEREFORE, the Parties agree as follows:
1. Article 5.6 of the Agreement shall be deleted and replaced in
its entirety by the following restated Article 5.6:
5.6 Either Party hereto shall be entitled to seek
injunctive remedies and relief against the other
Party and third parties for any breach or threatened
breach of any of these confidentiality and non-use
provisions. Furthermore, JAGO or INTERCARDIA shall
have the right to terminate the Agreement pursuant to
Section 9.2 (d) below upon the occurrence of a breach
of any of these confidentiality and non-use
obligations by the other Party, provided that prior
to such termination, the Parties shall consult on
such breach and discuss the materiality thereof,
whereby the non-breaching Party shall have the right,
in its sole discretion, to terminate the Agreement in
the event that it determines such breach as material.
<PAGE>
2. All other terms of the Agreement shall not be affected by this
Amendment and remain in full force and effect.
The Amendment is executed by JAGO Pharma AG, Intercardia Inc. and CPEC
Inc., by their duly authorised representatives, as of the dates of
signature shown below, and shall be effective as of the date first
written above.
JAGO PHARMA AG
(signature of Dr. Jacques
Gonella)
Muttenz, __ April 1996 By: --------------------------
Name: Dr. Jacques Gonella
Title: President
INTERCARDIA INC.
Research (signature of Clayton I. Duncan
Triangle Park NC, 23 April 1996 appears here)
By: --------------------------
Name: Clayton I. Duncan
Title: President & CEO
CPEC INC.
Research (signature of Clayton I. Duncan
Triangle Park NC, 23 April 1996 appears here)
By: --------------------------
Name: Clayton I. Duncan
Title: President & CEO
-2-
<PAGE>
